Automotive repair can be broken down into two broad categories. Repair to restore the functionality of a vehicle and repair to restore the appearance. With respect to functional repairs, identifying the cost of the repair is a relatively straight forward process. The repair will typically require a new or used part to replace a damaged one at a certain cost and will require a certain number of hours to complete the replacement. In such a repair, the tools used to remove and replace parts are not consumed and are typically not factored into the cost of individual repairs.
In contrast, body work (appearance restoration) on a vehicle utilizes a number of consumables in order to complete repairs. Certain consumables are used in almost every repair. Tape, in varying lengths, is employed in almost every repair that requires painting, the use of a scuff pad to prepare a surface to paint and a finishing pad to finish the painted area are almost universal. However these consumables are not as easily accounted for as items in a parts repair. Some of the consumables are not consumed in one repair but wear down over multiple repairs, making the accounting for such items difficult at best.
Increasing the complexity of the accounting problems are the regulations that govern reimbursement for automotive repair. Typically each state issues regulations governing the relationship between a consumer (automobile owner) a body shop and the insurance provider for the consumer. Additional parties may include wholesalers who provide the parts used in repairs, who may also acts as Jobbers (distributors of repair work). Generally, the regulations provide for the direct reimbursement of provable costs and indirect reimbursement in the form of a fair markup value for labor hours. Provable costs are costs in the form of materials that can be directly proven are used in the course of an ordinary repair. Typically such provable costs take the form of an amount of paint used to cover a particular body part, for example a front corner panel and the amount of paint used to blend, in other words, the paint used to make the new part color blend in with the paint color of the vehicle. A blend area is usually required where fresh paint is applied as a body shop can not perfectly match the car's color, but by getting the color as close as possible and blending the area between the fresh paint and old, the typical consumer can not detect the slight variation in tint.
Conventionally body shops are reimbursed for consumables used in such repairs at a specific rate set by insurance companies over the number of labor hours. Body shops, typically don't measure the amount of tape used, account for the life of a scuff pad, or the life of a finish pad used in the particular repair. Convention dictates that the body shop recover the costs of these items by adding a fair markup value to the hours required to paint. As insurance companies set this value, and control its' resetting, body shops are often left with un-reimbursed costs for consumables that directly impact their bottom line.
Certain systems have attempted to turn consumable costs into directly reimbursed costs. Such systems typically require the body shop worker to account for each and every item used in a repair, prepare an invoice to the insurance company based on the tracked usage of items, and bill accordingly. Such systems have seen limited adoption in the marketplace, because in one respect the burden is placed entirely on the body shop worker/manager to track for example, each inch of tape used, each sheet of sandpaper, among other consumables, making accurate tracking/billing more burdensome and/or costly than indirect reimbursement.